Investigation underway into collapse of agency £1.3m in debt

15 March 2021 | Renting

Investigation underway into collapse of agency £1.3m in debt

An investigation is underway into a lettings agency which has gone into liquidation owing almost £500,000 in rent to landlords and in debt to a total £1.3m.

Local media in the Midlands report that Homepoint – with branches in Wolverhampton, Stourbridge, Walsall and Birmingham – is being put into liquidation, owing £118,145 to tenants who had lodged deposits and £459,553 in rent collected from tenants, but not passed to landlords.

The trading standards division of Dudley Council is now probing the liquidation, which is being handled by insolvency experts Moore.

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A letter to creditors from Moore says that Homepoint, run by Ajit Singh Pooni, owed money to 328 creditors, including a large number of tenants who had submitted deposits for properties they were renting. 

Major creditors are reported to include HM Revenue & Customs, which is owed £72,078 in unpaid VAT, and Lloyds Bank, which is owed £160,347, which includes a £50,000 loan through the Government’s Bounce Back scheme. Pooni is reported to be seeking the repayment of a £287,924 loan he gave to the company, and a further £107,520 owed to himself and his wife.

The Express and Star newspaper reports today: “But while it is a legal requirement that deposits are placed into a government-recognised deposit protection scheme, the report to creditors revealed that in many instances this had not been done. It also said that the company had collected rent money from tenants, but not paid it to landlords.”

The newspaper says a report to creditors blamed the tenant fees’ ban in 2019 for the agency’s problems, accentuated by the spring 2020 lockdown. 

Councillor Nicolas Barlow of Dudley council says: “Our trading standards officers are currently investigating concerns raised in regards to this company and we are therefore unable to add anything further at this stage.”

Letting Agent Today has attempted to secure a comment from Homepoint.

This post has originally been featured in Letting Agent Today.